The KOSPI index fell to 6920 in early Thursday trading before recovering to 7058.06, gaining 0.09% during the session. The Bank of Korea (BOK) recorded that the index's daily volatility this year reached 4.1% — the highest figure among major global markets, roughly twice the level seen in Japan and Taiwan. Amid foreign investor net selling of shares worth 496.4 billion won during the session, shares of Samsung Electronics, SK Hynix, Hyundai Motor, and LG Energy Solution declined.
KOSPI's volatility is largely explained by the index's extreme concentration in the semiconductor segment. According to the BOK's September credit report, KOSPI's decline from above 9200 to the 6200 range last month was directly linked to the heavy weight of this sector in the index. Samsung and SK Hynix account for 51.2% of KOSPI's total value and were responsible for 69.3% of its decline during the latest selloff. An additional source of instability — the sharp expansion of speculative positions: double-leveraged exchange-traded funds (ETFs) tied to shares of these two chipmakers grew from $3.33 billion to $10.7 billion in just one month following their listing in May. According to BOK Deputy Governor Park Jong-woo, retail margin loans also reached a record level before sharply unwinding.
Additional pressure on the index comes from external factors: Brent crude prices remain above $100 per barrel amid escalating tensions in the Middle East, while the yield on 10-year US Treasury bonds hovers near 4.84%. Thursday's session coincided with quadruple witching — the simultaneous expiration of derivatives contracts — adding derivatives-driven volatility. Kiwoom Securities analyst Han Ji-yeon nonetheless believes the index could find support from corporate share buybacks and the return of foreign investors. The Bank of Korea recommended strengthening oversight of leveraged ETFs, emphasizing that the recent reduction in their volumes does not eliminate the need for ongoing supervision.